BOO CHANCO COLUMN: INFRASTRUCTURE, INFRASTRUCTURE, INFRASTRUCTURE
 

MANILA, JUNE 10, 2013 (PHILSTAR) DEMAND AND SUPPLY By Boo Chanco - If there is a mantra that P-Noy should drive into the consciousness of his cabinet members, it is infrastructure, infrastructure, infrastructure! Daang Matuwid is fine for starters but P-Noy will be remembered for infrastructure he has built. Otherwise, people will say “walang ginawa!”

The World Economic Forum’s 2012 Global Competitiveness Report, noted that Malaysia and Thailand had improved the quality of their infrastructure while the Philippines and Indonesia ranked near the bottom.

Specifically, on a scale of one to seven with seven being the highest, the Philippines scored the lowest, a 3.2 while Indonesia, Thailand, and Malaysia got 3.8, 4.6 and 5.1, respectively.

Impressive as our GDP growth rates may now seem, inadequate infrastructure is holding back a more robust growth of the economy. Unfortunately, without the needed infrastructure, we will miss opportunities for growth that are there now.

A good example of how inadequate infrastructure is restricting growth is the state of our airports, not just NAIA. Foreign airlines who want to schedule new regular or additional flights to Manila are unable to do so because NAIA is congested as it is.

I understand that alternate plans to reroute the requests to other airports in the country were ruled out because many of our airports are not night-rated or capable of servicing incoming flights that come in at night.

A reader wrote me to complain that “a year ago, we were told that most airports would operate at night to address congestion at NAIA.”

Indeed, Mar Roxas promised in a well publicized interview that “within the year, our airports in Tagbilaran, Legaspi, Dumaguete, Butuan, Ozamiz, Cotabato, Naga, Dipolog, Roxas, Pagadian, Tuguegarao, Busuanga, Surigao, and San Jose in Mindoro will all have a night vision capability.”

The reader reports that “two weeks ago, all runway light projects went back for further bidding. No contracts yet awarded.

CDO sent their lights back to Manila for repair… Worse, 5000 passengers stranded in Davao were shipped to Gen. Santos only to find that the X-ray machine there was broken.”

Goldman Sachs, in a research note observed that our country “ranks the weakest in infrastructure quality.” Nevertheless, GS was reported to have projected our infrastructure demand to reach $110 billion.

The Philippines could see the largest increase in demand for infrastructure from just over two percent to five percent of GDP, the bank said in that May 30 research note.

Our low base and rapid urbanization will drive infrastructure demand. GS observed: “This will increase demand for power, roads, airports, and water, among others... our projections suggest that infrastructure can contribute as much as 20 percent of the total investment rate in the Philippines till 2020.”

Indeed, as the investment bank pointed out, “an infrastructure build-out can directly contribute… to GDP growth and catalyze other investments in the economy. To the extent that power, road, airport capacities are increased, it helps increase manufacturing investment.” And we do need those manufacturing jobs for a more inclusive economic growth scenario.

The World Bank is saying pretty much the same thing. In a report, titled “East Asia and Pacific Economic Update,” the bank said catching up on government-infrastructure spending will provide the Philippines with the “fiscal spark that is still missing in the country’s growth path.”

If this happens, it would mean more employment and more opportunities even for small entrepreneurs. We want to have higher household incomes and, hopefully, less poverty, which, after all, is the ultimate goal of economic growth and development.

In terms of financing infrastructure development, GS said the additional burden on governments would be “largely manageable.” But the investment bank noted, “implementation would also be a key to meeting this projected demand.”

I would be the first to say that the intention of P-Noy to invest in infrastructure is there. The problem is really in implementation.

Budget Secretary Butch Abad said they are committed to increasing infrastructure spending to five percent of GDP by 2016 from the current level of 2.8 percent of GDP.

Under the 2013 national government budget, more than P400 billion will be spent on infrastructure, reflecting an increase of 19 percent from 2012.

As of March, disbursements for infrastructure totaled P58.1 billion, growing by 50.1 percent year-on-year and exceeding the period’s P55-billion program. Money is not going to be a problem. The problem is absorptive capacity of government agencies like DOTC to implement these projects. Thus, my pessimism!

I think P-Noy should have someone he trusts to monitor progress or lack of progress on his major infrastructure projects on a weekly or even daily basis.

Unless P-Noy takes a direct hand, our good GDP numbers may not be sustained. Worse, he will bow out of office in a whimper with a multitude of unfinished projects and projects that remain in study stage as he found them six years ago.

An engineer’s view

I got this e-mail from an expat engineer who is a regular reader of this column on recent events. I am not an engineer and do not understand half the points he raised but I think these are important enough to be discussed openly in the interest of public safety.

Since DOTC seems enamored with the term ‘Performance-Based Seismic Retrofit Design’ I attach a brief article explaining what it all means.

In brief, it means designing for varying earthquake strengths and corresponding levels of structural performance. For a big but infrequent earthquake we want to prevent total collapse while for the more frequent, smaller earthquakes we want to maintain a functioning (or at least repairable) building.

It involves complex, non-linear computer modeling and requires good data on the building structural properties as well as the seismic scene for the area. Neither of these conditions can be easily met in Manila so while it sounds slick, it is rather meaningless in my opinion within the local context.

The Serendra building damage is a good example of an apparently poor design decision that could also lead to severe seismic damage that no one anticipated.

The connection of the precast wall panels using what appears to be short dowels embedded in the structural frame in a manner that provided very little confinement or concrete cover over the bars resulted in the walls falling (or in this case being blown) out as a result of the explosion. In this case, it only affected one condo unit but a large earthquake would affect all units. A rather disastrous condition could result with many walls falling out and crashing to the ground from possibly great heights.

It seems the use of precast wall panels as well as glass curtain walls are quite popular in Manila now but with lots of potential problems. The problem with such systems is with how the connections are made to the structural frame to prevent being dislodged by thermal, wind and seismic forces. This needs to be carefully considered and it apparently is not being done very well in at least some cases.

I am sure local government building officials are not very knowledgeable in this area so it is potentially quite scary. We can not expect condo purchasers to look at the structural design of the building they are buying into, even if the developer was willing to let them see the detailed as-built plans.

I consulted a respected structural engineer and this is the gist of his comments on my reader’s comments.

The decision to use precast panels is not a “poor design decision”, it is an accepted practice in the industry not only in the Philippines. As usual, the perceived vulnerability of the connections must have come from poor execution.

The capacity of the dowels can be computed and governed by building code requirements and if indeed the dowels were short, then somebody committed a design error. Beside, the forces generated by an earthquake on these panels are not as severe as that generated by an explosion (which I am guessing came from an in-room gas explosion).

You have to consciously design for the higher forces of an unusually strong explosion if indeed you wish to say that your condo is explosion proof. But that is not a usual assumption in structural design.

The design of the anchoring of the precast panels is a critical design consideration but it does not mean that it is a “scary” proposition. Just like all the structural elements that go into the building... by law, the detailed analyses and designs and the computations are already the responsibility of the Structural Designer who has to sign for it and be responsible for 15 years that no collapse will occur.

Broker

Something to think about as the market plunges:

Have you ever wondered why the man you have given full authority to invest your money is called a broker?

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco


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